Banks change pay structures to avoid EU bonus cap

One-fifth (19%) of European bankers surveyed have been awarded ‘role-based’ allowances up to 12 February 2014, as the EU bankers’ bonus cap came into effect, according to research by salary data specialist Emolument.com.

Its research, which examined data from 190 banking employees at director and managing director level in Europe, found that 36 of those have received the allowance in 2014.

The EU bonus cap, which took effect from January 2014, requires bankers’ bonuses to be capped at 100% of fixed salary, or 200% with shareholder approval.

The ‘role-based’ allowance is not performance linked and is paid in monthly installments.

The research found that these allowances are widespread, with 17 different banking institutions across Europe paying them in 2014.

More than half (54%) of those receiving the allowance were based in London, following by 20% in Zurich and 17% in Paris.

Robert Benson, chief executive officer of Emolument.com, said: “London banks are changing the way they reward their staff and have taken the first steps ahead of their European peers to change the profile of pay.

“This is particularly the case for so-called ‘code’ staff; that is, those with significant responsibilities.”